Without substantial changes compared to the draft budget, which provides for 2.4% growth and support measures worth 1.76 billion euros, the final budget plan for 2026 was submitted to Parliament. The primary surplus is expected to reach 2.8% of GDP compared to 3.7% this year, while debt will be further reduced in 2026 to 138.2% of GDP from 145.9% of GDP this year, with prospects to fall to 119% of GDP in 2029 as explained by Finance Minister Kyriakos Pierrakakis during the budget presentation.
Budget 2026: all interventions
The fiscal interventions to be implemented from 2026 include a series of tax and wage reforms aimed primarily at strengthening income and reducing tax burdens, particularly for the middle class, families with children and young people. The main ones are:
– structural reform of the income tax scale for employees, pensioners, farmers and freelancers,
– non-offsetting of 50% of pension increases with personal difference for 2026 and abolition of personal difference offsetting from 2027,
– interventions in the special pay scales of the Armed Forces and Security Corps as well as interventions for other categories of employees, such as those of the Ministry of Foreign Affairs, members of Teaching Research Staff and researchers, engineers and other employees with five-year study cycles,
– gradual abolition of ENFIA for main residences in settlements with population up to 1,500 inhabitants,
– 30% reduction of VAT on islands in the North Aegean region, Evros prefecture and Dodecanese prefecture with population up to 20,000 inhabitants,
– introduction of intermediate rate of 25% on real estate income tax. In parallel, tax exemption for vacant houses to be rented in 2026 is extended as well as VAT exemption for new buildings, while the restriction of new short-term rentals in 3 municipal districts of Athens is extended temporarily and
– reduction of living standards for residences, ranging from 30% to 35%, significant reductions in objective expenses for cars, adjustments to minimum income for freelancers in settlements with population up to 1,500 inhabitants and exemption from minimum income for new mothers.
These interventions are carried out within fiscal targets. The total cost of new measures for 2026 amounts to 1.76 billion euros.
In addition to the above interventions, the minimum wage will be further increased in April 2026 with the goal of reaching 950 euros in April 2027 from the current amount of 880 euros. This increase affects unemployment benefit, maternity allowance, three-year allowances, overtime pay and basic salaries of civil servants.
Additional interventions are as follows:
· extension of the school renovation program “Marietta Giannakou” with an additional 300 million euros as a donation from the four systemic banks, bringing the total budget to 650 million euros. This intervention aims to renovate more than 2,500 school units,
· establishment of 100% super-deductions for investment expenditures in strategic sectors, such as defense and vehicle manufacturing as well as aircraft and their components and
· non-calculation of Solidarity Contribution for working pensioners based on the increase in their pension due to work.
Specifically, the tax scale reform consists of the following:
· reduction of tax rates by 2% for incomes from 10,000 to 40,000 euros. Specifically, tax rates are reduced:
– from 22% to 20% for income between 10,000 – 20,000 euros,
– from 28% to 26% for income between 20,000 – 30,000 euros and
– from 36% to 34% for income between 30,000 – 40,000 euros,
– introduction of new tax bracket with 39% rate for incomes between 40,000 and 60,000 euros,
– the rate for income from 10,000 to 20,000 euros, which will now amount to 20% for taxpayers without children, is further reduced according to the number of children and even more for families with three children to:
– 18% for taxpayers with 1 dependent child,
– 16% for taxpayers with 2 dependent children and
– 9% for taxpayers with 3 dependent children,
– regarding large families, greater reduction of rates is provided and specifically, for families with four or more children tax for incomes up to 20,000 euros is zeroed,
– the rate for income from 20,000 to 30,000 euros, which will now amount to 26% for taxpayers without children, is also reduced by 2 percentage points for each child, regardless of the number of children:
-24% for taxpayers with 1 dependent child,
– 22% for taxpayers with 2 dependent children,
– 20% for taxpayers with 3 dependent children,
– 18% for taxpayers with 4 dependent children and
– 16% for taxpayers with 5 dependent children etc.,
· zero tax for incomes up to 20,000 euros for young people aged up to 25 years and
· setting at 9% the rate for income from 10,000 to 20,000 euros for young people aged 26 to 30 years.
The fiscal cost of the reform, which is expected to benefit approximately 4 million taxpayers, is estimated at 1.2 billion euros for 2026 and 1.6 billion euros for 2027.
Pension increases
During 2025 the following measures were implemented:
· pension increase based on inflation and GDP by 2.4%, with fiscal cost 474 million euros,
· annual adjustment of Pensioners’ Solidarity Contribution limits, so that pensioners subject to it receive the full amount of pension increase,
· extension from 2025 of pharmaceutical expense exemption for low-income pensioners and
· establishment of social support of 250 euros every November for pensioners over 65 with low income criteria (14,000 euros for unmarried and 26,000 euros for married) as well as for uninsured elderly and people with disabilities, with annual cost 360 million euros.
The new measures for pensioners, beyond the benefits of tax reform and November support, to be implemented from 2026, are as follows:
· further pension increase based on inflation and GDP,
· non-inclusion of pension increase for working pensioners due to their work in calculating solidarity contribution and
· non-offsetting of 50% of pension increase with personal difference from January 2026, with full abolition of offsetting from January 2027. This measure is estimated to directly benefit approximately 671,000 pensioners.
The total cost of pension increases based on inflation and GDP and considering non-offsetting with personal difference, is estimated for 2026 at 629 million euros.
Civil servant salary increases
During 2025 the following measures were implemented:
· establishment of annual horizontal wage increase rule according to minimum wage increase, with fiscal cost for 2025 amounting to 215 million euros,
· separate taxation of NHS doctors’ on-call compensation, with cost 40 million euros,
· reduction of insurance contributions by one (1) unit in public sector, with cost 83 million euros,
· partial or full non-offsetting of personal difference in salary progression of civil servants, with annual cost 12 million euros increasing by 5 million euros annually,
· increase of goal achievement incentive, with annual cost 40 million euros,
· increase of night compensation for uniformed personnel, with annual cost 25 million euros and
· strengthening of Armed Forces and Security Corps personnel with special working conditions and hazard allowance of 100 euros monthly, with estimated total cost 111 million euros for 2025 and 222 million euros for 2026.
For 2026, beyond the benefits civil servants will have from tax reform, the following interventions worth 620 million euros are implemented:
· horizontal wage increase from April 2026, according to minimum wage increase, with estimated cost approximately 358 million euros,
· Armed Forces pay scale reform with increases applied from October 2025, annual cost 162 million euros (net cost 85 million euros after Armed Forces structure reorganization) and Security Corps (Hellenic Police, Fire Service, Coast Guard – Hellenic Coast Guard), annual cost 127 million euros,
· increases in foreign service allowance, special duties allowance and tuition fee allowances for children of Ministry of Foreign Affairs personnel, with annual cost 30 million euros,
· establishment of special duties allowance for prison staff with retroactive effect from July 2025, annual cost 6 million euros,
· salary recognition (two salary scales) for graduates of Polytechnic Schools and other University Schools with five-year study cycles, cost 7 million euros and
· establishment of tax-free library allowance for faculty members and researchers, with annual cost approximately 6 million euros and recognition of previous service of researchers in universities and technological organizations, regardless of employment relationship.
Housing problem interventions
In 2025 the following measures were implemented:
· new program “My Home II“, total budget 2 billion euros, with expanded age and income criteria compared to the first “My Home” program,
· income tax exemption for 3 years for owners who from 08.9.2024 to 31.12.2025 rent vacant houses with long-term leases or convert short-term property rentals to long-term,
· prohibition of registration for 2025 in the
